There is something peculiar about our present confusion over global affairs. The trouble is not merely that events move quickly, which they always do, but that our inherited frameworks seem to be losing their purchase on reality itself. When Trump returns promising economic nationalism while billionaires dismantle the state, when Europe suddenly embraces industrial policy after decades preaching market discipline, when semiconductor supply chains reveal themselves as instruments of strategic power, we find ourselves rather like travelers consulting a map only to discover the territory has been redrawn.

The conventional response reaches for familiar patterns. We are witnessing a pendulum swing, we are told: from too much market back to the necessary return of the state, from globalization’s excesses to a healthy nationalist correction. This narrative has the deeper appeal of suggesting we have been here before, that history moves in comprehensible cycles.

Milan Babić’s Geoökonomie: Anatomie der neuen Weltordnung (2025) argues this pendulum thinking is not merely inadequate but actively misleading. We are not reversing globalization so much as weaponizing it. States are not replacing markets but learning to instrumentalize the very networks of interdependence that globalization created: supply chains, technological chokepoints, financial infrastructure, undersea cables, all deployed for strategic advantage. The world economy is not deglobalizing; it is fragmenting horizontally into competing spheres that nonetheless remain vertically integrated and deeply entangled.

What distinguishes Babić’s analysis is his insistence on treating the geoeconomy as a fundamentally new configuration of state power and market organization, not simply geopolitics in economic dress. He maps an emerging order that resembles neither the neoliberal world we are leaving nor the simple nationalism some imagine awaits us. He attemps to make sense of what Gramsci calls our “interregnum”: that unstable period when the old order has lost authority but no new settlement has crystallized. More importantly, it offers resources for thinking about what progressive politics might look like beyond both exhausted neoliberalism and the false promises of populism.

The State Transformation

The heart of this transformation lies in how state power itself is being reconfigured. To grasp what is novel about our moment requires understanding what preceded it. The post-war democratic capitalism of the Keynesian era, for all its ecological blindness and exclusions, at least provided what Babić calls a “hegemonic minimum consensus” for broad populations. That settlement rested on a particular bargain: states would manage domestic demand, regulate finance, and maintain social protections, while capitalist economies delivered rising living standards within national boundaries.

Neoliberalism, which emerged in the 1980s, was as Babić is claiming, not primarily an ideology but a concrete configuration of power built on three processes. First, the financialization of economic life, which empowered global capital markets to discipline government spending and household debt alike. Second, the deregulation and flexibilization of labor markets, shifting risk from firms to workers. Third, and most consequentially for understanding our present, the creation of transnational opportunity spaces through global production networks, cross-border investment flows, and complex supply chains. This third element matters most because, unlike financial regulation or labor law, the material infrastructure of global interdependence cannot simply be reversed by policy change. Those undersea cables, semiconductor supply chains, and financial clearing systems represent decades of capital investment and institutional development. They are not dismantled but rather become terrain for strategic competition.

The state form that emerged to manage this neoliberal configuration was what scholars call the “competition state.” Its primary function was internal adaptation to meet the demands of mobile capital. Because global investors were “skittish” and alternative investment destinations always available, domestic economic policy focused on improving national competitiveness. The repertoire was familiar: corporate tax cuts, labor market deregulation, fiscal austerity, privatization of public services. As economist Michael Porter noted, state power became more, not less important during this era, but it was deployed to make economies attractive to footloose capital rather than to steer economic development toward social goals. What Babić identifies as the geoeconomic state represents something qualitatively different. Both state forms respond to a deeply interconnected global economy, but their relationship to that interconnection has shifted. The competition state adapted internally to globalization, treating the world economy as a constraining structure to which domestic institutions must adjust. The geoeconomic state, by contrast, seeks to instrumentalize global networks for strategic advantage. It develops tools to make the world economy available for political and economic purposes rather than simply accepting it as given.

This is not about “more” or “less” state intervention but about fundamentally different state functions. China and the United States have moved fastest in this direction, European states more haltingly. The geoeconomic state secures vulnerable supply chains through “onshoring,” establishes control over transnational infrastructure for energy imports or digital traffic, and deploys regulatory power to restrict competitors’ access to critical technologies. Where the competition state asked “how can we make our economy attractive?”, the geoeconomic state asks “how can we leverage global interdependence for relative gains?”

A second crucial difference concerns capacity inequalities between countries. Neoliberal strategies were, in principle, available to any government. Small states like Singapore could thrive by making themselves attractive nodes in global networks. Success did not depend on market size or geopolitical weight. But geoeconomic strategies require resources that most countries lack. Not every state possesses the regulatory reach to weaponize financial infrastructure, the market size to absorb the costs of reshoring critical industries, or the technological dominance to control supply chain chokepoints. Import-dependent economies, states specialized in particular export sectors, or geopolitically exposed nations have limited room to protect domestic industries or sustain strategic investment restrictions over time. Both offensive and defensive capacities are unequally distributed. Governments must, quite literally, be able to afford them.

This creates new hierarchies in international politics even as it transforms state power. The world Babić maps is not one of national sovereignty restored but of great powers learning to manipulate interdependence while smaller states navigate between competing spheres of influence.

The Economic Transformation

These state transformations manifest in a restructuring of the global economy itself. The world is not deglobalizing but fragmenting along new lines. Where neoliberal globalization created increasingly borderless markets, geoeconomic competition divides the world economy horizontally into competing spheres of influence while maintaining vertical integration within each bloc. Supply chains do not shorten but reorganize around geopolitical alignments. Trade and investment deepen among allies even as barriers rise between rivals.

This produces what Babić calls the economy becoming “more means than end.” Where neoliberal policy treated market integration as inherently beneficial, geoeconomic logic subordinates economic flows to strategic purposes. Investment screening mechanisms proliferate not to manage economic risks but to control technological access. Industrial policy returns not to create jobs but to secure sovereign capabilities in critical sectors. Financial infrastructure once considered neutral becomes weaponized. The IMF labels this “politically induced reversal of economic integration,” though the reversal is selective rather than comprehensive.

The economic consequences are substantial. Fragmenting markets while attempting to maintain complex production networks imposes costs through redundancy, inefficiency, and lost scale economies. Relocating pharmaceutical production or semiconductor facilities requires enormous capital outlays that strain even wealthy states. Energy infrastructure proves particularly inflexible; pipelines built for decades-long operation cannot simply be redirected. Meanwhile, global productivity growth has declined to under 0.4 percent annually in the last decade, the first such sustained fall in forty years. Whether this stagnation drives geoeconomic conflict or results from it remains unclear, but the combination produces distributional struggles over a slowly growing pie rather than competition to expand it.

Most critically, multinational corporations remain powerful actors in this transformed landscape. The geoeconomic state cannot simply capture and instrumentalize firms that have spent decades building structural power through transnational operations. The emerging order thus features not state control over markets but ongoing negotiation between states seeking strategic advantage and corporations defending autonomous profit-seeking.

The Political Interregnum

The political expression of this transformation takes a form Babić calls “false populism”: systematic inversion where populist rhetoric serves oligarchic interests. Trump champions forgotten workers while empowering billionaires; the AfD rails against elites while proposing policies devastating to the working class. This is not broken promises but structural contradiction.

The extreme electoral volatility itself signals instability. For progressive politics, however, this instability creates openings foreclosed during neoliberal hegemony. Popular majorities exist for wealth redistribution and climate action; the ideological advocates of neoliberalism have largely disappeared. History has reopened and the relationship between capitalism and democracy can be fundamentally renegotiated.

Yet Babić’s analysis, for all its diagnostic power, suffers from prescriptive vagueness. The book excels at mapping transformation but offers little guidance on what progressive politics should actually do. How should states pursue industrial policy without triggering wasteful subsidy races? How can the left respond to supply chain vulnerabilities without embracing nationalism? Most critically, how can geoeconomic competition be reconciled with the international cooperation climate action demands? Still, Babić offers no blueprint but rather a map: understanding how state power, market organization, and political possibility are being transformed allows us to navigate what remains profoundly uncertain. His analysis succeeds in making visible a transformation most commentary either denies or misunderstands. By insisting that we are neither reversing globalization nor simply experiencing its cyclical correction, he provides conceptual tools for grasping how interdependence itself becomes weaponized. The distinction between competition state and geoeconomic state, the emphasis on horizontal rather than vertical fragmentation, the diagnosis of false populism as systematic inversion rather than mere hypocrisy, clarify what pendulum thinking obscures. The interregnum may create openings foreclosed under a neoliberal order, but navigating them will require wrestling with tensions the book illuminates without offering any paths to solution.